Brent crude oil futures market leads price discovery and risk transfer.
The study looked at how prices are determined and risks are managed in the Brent crude oil futures market. They found that both current and future prices affect price discovery, with future prices having a bigger impact at different times. Longer-term futures contracts are more influential in setting oil prices. However, the crude oil futures market doesn't effectively transfer risk when interacting with current prices or between different futures contracts. These results are important for people involved in the market and those making policies.